Another Word About QITs – Part 4

In my February 22 post I wrote about QITs and specifically about a case involving an application being denied because the QIT was improperly funded.  In that case my client established the QIT just before the pandemic and funded the QIT correctly in the first month but not in the several months after that.  We appealed the denial and the court last week issued its decision.

QITs are used when an applicant’s monthly income exceeds the income cap ($2382 in 2021).  Without it’s proper use the application will be denied.  Since the income, from Social Security and pension, cannot be reduced, using the QIT is the only way an applicant will be approved.

The State has imposed specific restrictions with regard to using the QIT.  As I previously explained, enough income must be passed thru the QIT such that the remaining income (that is not deposited into the QIT) is below the income cap.  Additionally, one cannot split income from one source to drop below the income limit.  For example, if an applicant has total income of $3000 per month of which $1500 is Social Security, he or she can’t split the Social Security by putting $500 into the QIT which would drop the remaining income below the income cap.  The entire $1500 must be deposited into the QIT.

All income must then be given to the nursing or assisted living facility with a few limited exceptions.  Income may be kept for health insurance premiums and Medicaid allows recipients to keep a small monthly amount called a personal needs allowance (PNA).  For nursing home residents that amount is $50 and for assisted living facility residents it is $117.50.

Applying the QIT rules means depositing the entire source of income into the QIT and then withdrawing the PNA and amounts to pay for the health insurance premiums.  Once the pandemic occurred and the entire country shut down, including banks, that became problematic.  Banks were closed for months and then eventually began to open but with reduced hours.

Against that backdrop, the trustee in our case subtracted the $50 PNA (the applicant had no health insurance premiums) before depositing the remainder of the monthly Social Security, a technical violation of the State’s rules.

The court excused the technical violation caused by the  COVID-19 pandemic, noting the business closures and then restricted access to businesses. This resulted in her inability to access the QIT account.  The court did note, however, that without the global pandemic the trustee’s actions would not be excusable.

The court ordered that the denial be reversed, although under administrative court rules, the State has 45 days to reject or modify the decision.  Nevertheless, the court recognized the unique situation caused by the current global pandemic and the unfairness in denying Medicaid for a slight technical violation.  Still, the clear message remains the same.  Pay close attention to the QIT rules because the State is scrutinizing them closely.